Burden or gift? How to correctly pass your business onto your children.

Many family businesses have been around for generations. After all of your hard work and determination, why not consider investing in your children, and grandchildren, by transferring ownership rights (and all the joys that go along with managing a small business!) to your next of kin?

My first recommendation, of course, is to determine who would be the ideal candidate to facilitate your business once you’ve stepped away, be it your recently-graduated daughter, or technology savvy nephew. If you have multiple children, this decision may be more difficult, but once the decision has been made, you want to make sure the process is done properly.

The key to passing on your business – really, to anyone – is to have the right plan in place. The first step, according to Daniel Prisciotta, a CPA and certified financial planner with Rochelle Park, N.J.-based Equity Strategies Group, an affiliate of Lincoln Financial Advisors, is to sit down with your financial planners and make a comprehensive financial plan.

“An exit plan analyzes your objectives and resources, both personal and business, including the financial, tax and legal aspects of business transfer. This is probably the biggest financial decision of your life, representing many years of hard work,” Prisciotta says. “You only get one chance to transfer your legacy properly.”